State lawmakers take up deficit plan

Published 7:00 pm, Wednesday, January 14, 2009

As Connecticut lawmakers considered a plan late Wednesday to trim the current fiscal year's deficit by about $133 million, they learned their efforts will likely be a drop in the bucket.

Preliminary figures show state tax revenues are falling fast and the deficit could still balloon to about $1 billion. That gives policymakers just 167 days to come up with a way to balance the current fiscal year.

"We're clearly not at the end of the line today addressing 2008-09 (fiscal year deficit)," said Rep. Cameron Staples, D-New Haven, co-chairman of the General Assembly's tax-writing committee.

The $1 billion deficit figure doesn't account for the $6 billion in red ink that's predicted for the next two fiscal years, which begin on July 1.

Thursday marks the deadline for taxpayers to make their final quarterly payment for the 2008 tax year. Gov. M. Jodi Rell's office said payments are running about 22 percent below the same period last year.

The House of Representatives passed the deficit-cutting plan on a mostly party-line vote of 111-35 after more than four hours of debate, led mostly by the minority Republicans who called for deeper cuts in spending and claimed the bill does not come close to tackling the deficit -- last estimated at $343 million by the state comptroller's office.

The bill passed on a party-line, 24-12 vote in the Senate -- also controlled by Democrats -- shortly before 1 a.m. on Thursday.

Rell, a Republican, said the legislation fell short of what's needed to help erase the current fiscal year deficit.

"They didn't make as many cuts as we needed and they added money back -- particularly for their own spending -- while some of their supposed cuts are based on false assumptions," she said in a written statement. "But at least they have acted, and I will sign the package into law."

House Majority Leader Denise Merrill, D-Mansfield, defended the latest deficit-cutting plan and said lawmakers are taking a careful approach to the budget, wanting to stimulate growth and not contribute to the state's economic downturn.

"We in Connecticut did not cause this problem, the causes are national and international in scope," she said. "We are trying to respond to a situation in which we find ourselves and we're trying to do the best we can."

More than an hour was spent in the House debating a GOP amendment to cut legislators' salaries by 5 percent. It failed on a mostly party-line 111-35 vote, with two Democrats siding with the Republicans.

Rep. William Hamzy, R-Terryville, said he'll still ask the state comptroller's office to cut his pay anyway.

"I cannot make a cut with a clear conscience without sacrificing something myself," said Hamzy, who estimated an across-the-board cut for all lawmakers would save about $500,000 and send a strong message to struggling taxpayers.

Rep. Christopher Caruso, D-Bridgeport, who opposed the move, accused Republicans of cutting "aimlessly." He said Connecticut House members earn a base pay of just $28,000 and haven't received a pay raise since 2000.

"If you cut our salaries it's going to affect the very economy we're trying to straighten out," he said.

Senate Republicans were unsuccessful in their attempt to pass a similar measure. Their proposal called on lawmakers, commissioners and top leaders such as the governor to take a 10 percent pay cut. Another failed GOP amendment would have furloughed state employees one day in January and two days each month through June, saving an estimated $17.4 million.

"It's the type of decision we're going to have to make," said Senate Minority Leader John McKinney, R-Fairfield.

Democrats said some of those types of ideas will likely be discussed later in the legislative session.

Wednesday's deficit-cutting bill mirrored much of the proposal that Rell offered late last year. It transfers money from funds and special accounts to cover revenue declines and requires that unclaimed beverage deposits are awarded to the state as of April 30. Currently the beverage distributors receive the unclaimed nickels.

The bill also requires Rell to reduce consulting services for the state by at least $10 million.

However, the Democratic plan pared some of the reductions Rell had originally proposed. For example, instead of shifting $17.9 million from the state's new public campaign financing fund, the Democrats' plan shifts $7.5 million.

Their plan also protects funding in other accounts, including money for farmland preservation, clean diesel buses, energy conservation and biomedical research.

But lawmakers acknowledged they might have to revisit those funds later in the session as they try to tackle the next two fiscal years.

Some new funding was included in the plan, including $274,000 on health care coverage for custodians that work at the state Capitol complex. While there was some criticism from Republicans, Rep. John Geragosian, D-New Britain, co-chairman of the Appropriations Committee, said not funding the coverage could ultimately cost the state $400,000.

He said the issue was a good example of the predicament lawmakers find themselves in: each cut in state spending has consequences.

Wednesday's debate came the same day that Rell's staff met privately with representatives of state employee unions to discuss possible concessions.

Several arbitrated contracts face action by the legislature in the coming weeks, and Rell has urged lawmakers to defeat a three-year contract for correctional officers that provides general wage increases of 3 percent in the first year, 2.5 percent in the second and 2.5 percent in the third.

The pay increases match the state's last best offer to the union.

The legislature has 30 days to act. If it does not, the contract will automatically take effect.

House Republicans offered an amendment that would extend that deadline to June 3, but their proposal died on a 110-35 vote.